The peace deal is set to begin early Sunday at the latest, a Sheikh Salah al-Obeidi, spokesman for Shiite cleric Moqtada Sadr's group said.

Ali al-Dabbagh, a spokesman for the Iraqi government, also said a cease-fire deal had been made, CNN reported.

Iraq and the Sadrists began talks to end fighting earlier this week, during which the United Iraq Alliance was used as a mediator, al-Obeidi said.

CNN reported leaflets passed out in Sadr City by Sadr's Mehdi fighters cautioned against any cease-fire announced in the news.

"Be aware that the enemy's propaganda controls all channels and satellites and in one way or another they are trying to affect our determination and morale," a leaflet read.

The peace agreement is intended to stop the militants' "armed presence" in Sadr City, prompting the government to allow aid to enter the area and injured people to leave, al-Obeidi said.